EU Commission Probes TeliaSonera's Telecominvest Buy

MOSCOW, Mar 31 (Prime-Tass) -- An E.U. commission on antimonopoly policy has started probing the purchase of a 26% stake in Russia's telecommunications holding Telecominvest by Swedish-Finnish telecom operator TeliaSonera, Vedomosti business daily reported Friday, citing Denmark's Borsen and Finland's Helsingin Sanomat newspapers.

Telia, which merged with Sonera in 2002, bought 32% of shares in Luxembourg's First National Holding (FNH), which controlled 51% of Telecominvest, in February 2000. Several months later, Telia exchanged its stake in FNH for 26% in Telecominvest, Vedomosti said, adding that at the time of the exchange FNH owned 75% of the Russian holding.

Germany's Commerzbank was the only owner of FNH at that time. But in 2004 it became publicly known that Commerzbank was only a nominal holder, while the real shareholder was Danish lawyer Jeffrey Galmond, the daily said.

The E.U. commission now suspects that Telia did not disclose the real seller of Telecominvest's stake on purpose, the daily said, adding that TeliaSonera may face a fine of 1% of its annual revenue. TeliaSonera's revenue in 2005 stood at U.S. $11.2 billion.

"We thought we were negotiating the deal with Commerzbank. We had no grounds to think the bank was acting in the interest of third parties," Michael Kongstad, TeliaSonera's vice president, said.

However, Galmond told Vedomosti that in January 2000 he met with Bo Magnusson, Telia's vice president at that time, and the latter offered to invest $80 million in Telecominvest. But in all the documents the seller of Telecominvest's stake was Commerzbank, Galmond added.

Currently, TeliaSonera's Russian assets include a 26% stake in Telecominvest and a 35.6% stake in Russia?s third largest mobile operator MegaFon. Telecominvest controls 31.3% in MegaFon.

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Posted to the site on 31st March 2006